Telcos deny latest rate increase proposal is cash grab; hearing begins next week

The CRTC will begin hearings next week in Hull QC into applications by several major ILECs for rate increases - a move described by a consumer watchdog group as serving the interests of shareholders, not consumers. The Public Interest Advocacy Centre (PIAC) is also calling on the commission to review its price cap formula, saying it has turned out to be too generous for the phone companies. If the rate increases are approved, PIAC lawyer Pippa Lawson says consumers could end up paying as much as $35 a month over the next four or five years. She describes the applications as a "cash grab." "We haven't seen any justification for rate increases," she told Network Letter. "And I think it's interesting that instead of providing justification in the form of costs or earnings, all we're seeing here is a focus on what customers might tolerate in terms of increases." PIAC is calling for changes that provide a better balance between the interests of telcos, ratepayers and competitors. "The issue is fairness between ratepayers and shareholders. And they're just focusing on the shareholders." Bell Canada sees things in a slightly different light. It counters that the pressure of opening up local competition put stress on the networks. "The thing we're trying to do here in going forward is allowing prices to move up gradually. It gives us a better chance to continue to develop in the market," Robert Farmer, Bell's VP regulatory matters says. "I don't know if one would call that a money grab. Apparently they would; I wouldn't." Next week's hearing - stemming from Public Notice 2001-37 - has attracted much attention from telcos, competitors, public interest groups and others. The original roster of Parties to the Proceedings and Interested Parties listed 60 names, including federal, provincial and municipal governments; consumers' groups; law firms; and private individuals. Telecom proceedings are infamous for their procedural wrangling and this one is no different - if anything, it's been more contentious. The maze of topics raised in the original applications forced the commission to issue an earlier decision (2001-582), which sought to clarify some of the points put forward. The two largest ILECs are not certain it achieved that goal. Both Bell and Telus Corp submitted letters seeking further clarification. For example, the western telco is unsure if the original local competition ruling is to be affected. In its 1997 ruling (Decision 97-8), the CRTC laid out the terms and conditions opening up the market to more players. "The commission has not indicated to what extent, if at all, portions of the Decision 97-8 framework are in play in PN 2001-37," Mark Kolesar, assistant VP regulatory and public policy, wrote on Sept. 14. "Accordingly, Telus reiterates its question: Does the commission intend to vary Decision 97-8? If so, what specific aspects of Decision 97-8 are within the scope of PN 2001-37?" The company also maintains that other provisions in 2001-582 have addressed concerns raised by others and should now be declared outside the scope of the proceedings. It specifically mentioned several paragraphs in the submission from Rogers Communications Inc. In his Sept. 13 letter to the CRTC, Farmer asks that, in light of 2001-582, portions of the filings from Call-Net Enterprises Inc and GT Group Telecom Inc be ruled outside the purview of the proceeding. All of this procedural argument doesn't impress Lawson and her colleagues at PIAC. In short, she maintains that the shift to local competition has not panned out and is calling on the CRTC to take a stronger role. "This remains a monopoly service, a natural monopoly in many areas, and there's no indication we're going to get effective competition over the next four to five years in the residential market. So there's no question we need to continue to have the regulator very much involved."

Telcos deny latest rate increase proposal is cash grab; hearing begins next week

News | 09/24/2001 4:00 am EDT

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